ANZ Banking Group
has appointed boutique advisory firm Flagstaff Partners to ramp up the sale of its trustee unit in an attempt to capitalise on attractive valuations in the sector.

Final bids for the unit are due at the end of March, in a sale which may fetch more than $120 million, sources told The Australian Financial Review.

An ANZ spokesman on Monday declined to comment on the slated sale.

Former ANZ chairman
Charles Goode
now chairs Flagstaff. The Melbourne-based boutique company also advised
The Trust Company
on its takeover defence, which last year erupted into a bidding war between
Perpetual
,
IOOF Holdings
and
Equity Trustees
. Perpetual eventually elbowed aside its rivals, but had to pay a hefty $280 million to acquire Trust Co.

ANZ started considering a sale of its own trustee business about 10 months ago as demand for assets accelerated.

ANZ Trustees sits under the bank’s wealth division, headed by Joyce Phillips. The business includes operations in investment management, philanthropic services and estate planning.

The unit is thought to have earnings of about $10 million a year. If the multiples paid for The Trust Company are applied, ANZ Trustees could easily be auctioned for more than $120 million.

Pre-acquisition synergies, Perpetual’s purchase of Trust Co was completed at 21 times the target’s earnings. That drops to about 12 times earnings post-synergies.

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‘IOOF and EQT are the logical acquirers’

Other parties that may run a ruler over the ANZ unit include Sandhurst Trustees, owned by
Bendigo and Adelaide Bank
, registry business
Computershare
or private equity firm Archer Capital.

Industry players suggested Perpetual may have to again lodge a sub­mission to the Australian Competition and Consumer Commission if it makes it through the ANZ Trustee bidding process. Perpetual is the largest player in the sector. In a report last year, IBISWorld estimated the industry’s annual revenue at $452 million, and noted that in 2012 ANZ held 5.2 per cent of the trustee market when state-owned trustees were included.

Players in the industry are jostling for assets or, conversely, are considering opting out as they may lack scale.

“IOOF and EQT [Equity Trustees] are the logical acquirers if the ANZ business is spun out," Commonwealth Bank of Australia analyst Ross Curran said.

“They have the ability to utilise their existing cost base to extract synergies.

“It is likely that existing shareholders would be supportive [of such a purchase], as these assets don’t come along very often."

Mr Curran also noted that both IOOF and EQT may need to raise equity to execute a purchase of the ANZ unit.

As part of the Perpetual tilt at Trust Co, IOOF emerged with a stake in rival Equity Trustees, also creating tension.

A strong rally in Equity Trustee’s share price has warded against any takeover moves.

But IOOF, which owns Australian Executor Trustees, is understood to have a keen eye on acquisitions. It is thought to have recently made an in­formal approach to Tasmanian-based MyState about purchasing its trustee unit.

IOOF declined to comment on Monday, as did Perpetual and Bendigo and Adelaide Bank. Equity Trustees did not return calls seeking comment.